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Is This the Right or Wrong Time to Sell Commercial Real Estate

December 5, 2007 – 4:41 pm

As is the case in Buying, there are always many people questioning whether this is the right time to sell their commercial real estate. It doesn’t matter that prices have hit historic peaks, they want to be sure that they “don’t leave money on the table”.

Timing is always important in selling but it is not the end all that people think it is. One’s own circumstances are the most important determining factor in deciding when to sell.

Some people simply must simplify their lives and cannot cope with the complexities of their properties. Some people are retiring and they don’t have any heirs that can adequately watch over the properties, or if they do they are too far away. Some people want to do a 1031 tax deferred exchange into another type of property for a myriad of reasons.

These people often need to sell now, and probably should not be trying to time the market so they can sell at the exact right time. For one thing, I don’t know anybody who can predict when the exact right time is. I wish that I did.

I have spoken with a great many people who have tremendous equity in their properties but still are afraid to sell. With the federal capital gains taxes low and the ability to exchange into another property or into a tenant in common property it may be accurate to categorize their fear as somewhat irrational.

Selling at a loss is always a tougher decision. However, selling with a good gain and return on the invested dollar is usually not a foolish thing to do. Waiting until the market peaks may be foolish if you have other reasons for selling. Chasing a down market while holding on to one’s property probably is foolish.

Let me know what you think about selling commercial real estate.

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